Trade Uncertainty and Immigration Shifts Are Redefining Canada’s Housing Market in 2026

Canada’s housing market is entering 2026 in a period of recalibration, shaped by trade uncertainty, shifting immigration levels, and uneven regional performance. While borrowing conditions and employment trends have improved compared to previous years, buyer confidence remains cautious as broader economic forces influence housing decisions.

Insights shared by Royal LePage suggest that housing activity is no longer driven primarily by interest rates. Instead, trade-related concerns and population changes are playing a growing role in shaping demand.

Trade Uncertainty Replaces Interest Rates as the Main Concern

According to Royal LePage CEO Philip Soper, uncertainty around tariffs emerged as the single biggest factor weighing on housing activity in 2025. Even as interest rates shifted from being a barrier to a neutral or supportive factor, many consumers delayed major purchases due to broader economic concerns.

The estimated impact of trade uncertainty is a 2% to 4% drag on home prices, particularly in higher-priced urban markets.

Immigration Changes Reshape Housing Demand

Changes in immigration levels have had a pronounced effect on housing, especially in the condominium sector. Fewer temporary foreign workers and international students have reduced rental demand in major cities, weakening investor confidence.

Urban condo markets, which rely heavily on small-scale investors to supply rental housing, have been hit hardest. When interest rates peaked, many investors exited the market. While rates later eased, the expected rebound did not fully materialize due to lower tenant demand.

National Resilience with Regional Softness

Nationally, aggregate home prices are forecast to rise by approximately 1% by the fourth quarter of 2026. However, this modest growth masks regional disparities.

In major markets, price declines are expected to continue. Forecasts suggest prices could fall by 4.5% in the Greater Toronto Area and 3.5% in Greater Vancouver. These declines are driven by a combination of oversupply, reduced investor activity, and slower population growth.

In contrast, more affordable regions are experiencing steadier conditions, with modest gains as buyers seek alternatives outside Canada’s most expensive cities.

A More Balanced Environment for Buyers

Sales-to-listing ratios now indicate a more balanced market, with neither buyers nor sellers holding a decisive advantage. This shift has improved conditions for first-time buyers, who can negotiate more effectively and include conditions in purchase agreements.

For younger households, softer prices and increased choice may offer opportunities that were largely unavailable during the peak years of the pandemic housing boom.

Policy Execution Will Shape Future Outcomes

Looking ahead, housing performance in 2026 will depend heavily on government coordination. Immigration planning, housing supply initiatives, and trade policy decisions will all influence confidence and activity.

While governments at multiple levels have outlined strategies to boost housing supply, the pace and effectiveness of implementation will determine whether market stability improves. Canada’s housing market in 2026 reflects a broader economic transition. Trade uncertainty and immigration shifts are reshaping demand, particularly in major urban condo markets, while national prices remain relatively resilient. As the country adapts to these changes, a more balanced but uneven housing landscape is likely to define the year ahead.